How do i journalize these? 2006 Feb 3 purchased equipment for 10,000, signing a
ID: 2386354 • Letter: H
Question
How do i journalize these?2006
Feb 3 purchased equipment for 10,000, signing a six month, 9% note payable
Feb 28 recorded the weeks sales of 51000 one third for cash and two thirds on account. All sales amounts are subject to a 5% sales tax.
Mar 7 sent last weeks sales tax to the state.
Apr 30 borrowed 100000 on a four year 9% note payable that calls for annual payment of interest each April 30.
Aug 3 paid the 6 month 9% note at maturity
Nov 30 purchased inventory at a cost of 7200 signing a three month 8% note payable for that amount
Dec 31 accrued warranty expense which is estimated at 3% of total sales of 260000
Dec 31 accrued interest on all outstanding notes payable. Accrue interest for each note separately.
2007
Feb 28 paid off the 8% inventory note plus interest at maturity
Apr 30 paid the interest for one year on the long term note payable for
Explanation / Answer
Date Particulars Debit ($) Credit($) 3-Feb-06 Equipment 10,000 Notes payable 10,000 (Purchased equipment on issue of notes) 28-Feb-06 Cash 17,000 Accounts receivables 34,000 Sales 51,000 28-Feb-06 Sales tax expense 2,550 Sales taxpayable 2,550 7-Mar-06 Sales tax payable payable 2,550 Cash 2,550 30-Apr-06 Interest expense(10,000*9%*1) 900 Cash 900 (Annual interest payment) Aug 30,2006 Notes payable 10,000 Interest expense 450 Cash 10,450 (Paid off bonds at maturity) 30-Nov Inventory Notes payable (purchased inventory on singing notes at 8%) 31-Dec-06 Warranty expense 7,800 Accured warranty liability 7,800 31-Dec-07 Interest expense 6,000 Interest payable 6,000 (To record accrued interest expense on Apr 30 bond) Interest expnese 480 Interest payable 480 (To record accrued interest expense on Nov 30) 30-Apr-07 Interest expense(10,000*9%*1) 900 Cash 900 (Annual interest payment)
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